Google Challenges Microsoft in UK Cloud Market, Urges CMA Action

Google has urged Britain's antitrust regulator, the CMA (Competition and Markets Authority), to take action against Microsoft. The tech giant claims that Microsoft's business practices have put its rivals at a significant disadvantage in the market.

CMA Investigation into Britain's Cloud Computing Industry

Reuters reported that the CMA launched an investigation into the cloud computing industry in Britain following a referral from media regulator Ofcom. This referral highlighted the dominance of Amazon and Microsoft, specifically AWS (Amazon Web Services) and Azure. These two companies combined had a market share of 70-80% in 2022, while Google's cloud division accounted for only 5-10%, per Market Screener.

Google's letter to the CMA emphasized that Microsoft's licensing practices unfairly discouraged customers from using competitor services. Even when customers preferred rivals' prices, quality, security, innovations, and features, the licensing restrictions left them with no economically reasonable alternative but to use Azure.

Impact on Customers and Competition

Google stated that Microsoft's practices directly harmed customers and were the primary barrier to competition in Britain's cloud computing market. While Microsoft implemented changes to address concerns, rivals, including Google, remained dissatisfied. The company argued that Microsoft's practices would lead to fewer cloud providers, stifling innovation and shrinking investments.

Google Cloud Vice President Amit Zavery criticized Microsoft's practices and expressed his company's commitment to a multi-cloud approach. Google emphasized the importance of allowing customers to move between cloud providers quickly based on their needs. Interoperability between various software and cloud services is vital in fostering innovation.

A key issue at the heart of the matter is Microsoft's updated terms for using software licenses in the cloud. This change resulted in higher costs for customers who opted for Google or AWS instead of Azure. Zavery highlighted that AWS consumers did not face this restriction, emphasizing the need for fair competition in the market.

Google's Recommendations to the CMA

Google proposed six recommendations to the CMA to improve the competitiveness of the cloud computing market. These include enforcing better interoperability for Azure customers using other cloud services and banning Microsoft from withholding security updates for customers who switch providers.

Photo: Google France Newsroom